Assume an organization's current service level on order à ll is as follows:
Current order áll $=80 \%$
Number of orders per year $=5,000$
Percentage of unảlled orders back-ordered $=70 \%$
Percentage of unảlled orders cancelled $=30 \%$
Back order costs per order $=\$ 150$
Lost pretax proát per cancelled order $=\$ 12,500$
a. What is the lost cash flow to the seller at this 80 percent service level?
b. What would be the resulting increase in cash flow if the seller improved order all to 92 percent?
c. If the seller invested $\$ 2$ million to produce this increased service level, would the investment be justiảed ảnancially?